Following BMO’s lead – which raised its fixed rates on Tuesday – both RBC and a number of monolines have raised their rates. And another big bank is expected to announce their increase very soon.
“The monolines have raised their rates almost across the board,” Steve Harrison of Dominion Lending Centres Mortgage Village told MortgageBrokerNews.ca. “TD is raising them tomorrow, they’ve held off for a few days.”
On Wednesday RBC announced it had raised its five-year, fixed-rate to 3.89 per cent – an increase of 20 basis points.
“This is the beginning of a test for the mortgage market,” said Benjamin Tal, deputy chief economist at CIBC World Markets, told the Globe and Mail. “It’s a test of how Canadians are able to tolerate higher interest rates.”
For the time being, though, certain monolines are still offering very competitive rates, which may prompt brokers to lock clients in as soon as possible.
“There are still a couple monolines that are below the big bank rates. You can still get 3.19 per cent, 3.29 per cent and hold them for 90 days,” Harrison said.
Brokers may start suggested variable rates, as they have so far held steady.
“The variable rates are still great right now,” Harrison said. “It’s hard to say if they will go up; they’re hard to predict.”